Ergon gets initial OK for refinery expansion

March 23, 2013

NEWELL - West Virginia environmental officials have given preliminary approval to the planned expansion of the Ergon Inc. oil refinery in Newell.

The $78 million expansion project, expected to begin in April and continue into 2014, will increase the refinery's capacity to process regional crude oil by upgrading and adding equipment. Currently, the plant has the capacity to process more than 20,000 barrels per day of Appalachian grade crude oil, which it gets from facilities in Ohio, West Virginia, Pennsylvania and elsewhere.

The permitting process overseen by the West Virginia Department of Environmental Protection's Division of Air Quality will ensure that the expansion meets all state and federal air quality standards, including those set by the Clean Air Act, said Laura Jennings, Division of Air Quality technician analyst.

"All of the rules and regulations that are in place are developed to protect public health," Jennings said. "When we go to approve a modification, it has to be within those requirements set at the state and federal levels."

Jennings' preliminary finding that Ergon's planned expansion meets all state and federal air quality standards triggers a public comment period, which lasts until April 10. A public meeting on Ergon's permit application will be held only if the level of public interest warrants it.

Once the public comment period expires, the permit will receive final approval, Jennings said.

The application filed by Ergon-West Virginia Inc. last October asks for a modification of its existing permit. The expansion includes the replacement of a heater, the replacement of a reactor and an increase in the overall throughput, or production, capacity of the unifiner/platformer unit, according to Jennings' written summary of Ergon's application.

The unifiner treats petroleum naphtha from the crude distillation unit in preparation for its conversion to gasoline blends. "The increased unifiner capacity leads to the increased production of gasoline, which is stored in the tanks until it is loaded into trucks to be shipped off-site," the application said.

The resulting increase in output will cause an increase in potential emissions at five tanks, the tanker truck loading rack and the truck loading thermal oxidizer, an air pollution control device, Jennings said.

Emissions authorized by the permit are measured in tons per year and include sulfur dioxide, oxides of nitrogen, carbon monoxide, volatile organic compounds and benzene, according to the Division of Air Quality.

The replacement heater will increase the reliability of the unifiner unit and will reduce energy consumption at the facility, according to Ergon's application. As a result of the replacement reactor, throughput to the unifiner will increase to 219,000 barrels per month, the application said.

"There will be an increase of finished gasoline sent through the tanks and loading operations as a result of the unifiner increase," the application said.

Ergon officials, who could not be reached for comment, have said in previous interviews that the expansion will be done in phases and will enhance the refinery's capacity to handle new crudes coming out of the Marcellus and Utica shales.

Originally built in 1972, the refinery was bought by Ergon Inc. from Quaker State in 1997, according to the Jackson, Miss.-based company's website.

The process and base oils refined in Newell are used in a wide variety of applications, including motor oils, gear oils, greases, pharmaceutical and agricultural spray oils, food grade applications, and in high-temperature rubber applications, according to the website.

The plant, which employs 180 people, is not planning to do any hiring to support its expansion.